HELOC Draw Period Payment Estimator
The HELOC draw period is typically 5-10 years when you can access funds and make smaller payments. Understanding your payment obligations during this period is crucial.
What Is the Draw Period?
The draw period is the first phase of your HELOC (usually 10 years) when you can:
- Borrow up to your credit limit as needed
- Make interest-only payments (minimum requirement)
- Pay down principal and reborrow (revolving credit)
Draw Period Payment Options
Interest-Only Payments
- Minimum required by most lenders
- Payment = (Balance × Rate) ÷ 12
- Example: $50,000 at 8.5% = ~$354/month
Principal + Interest Payments
- Pays down balance over time
- Higher monthly payment
- Reduces repayment shock later
Example Draw Period Payments
| Balance | Rate | Interest-Only | 20-Year Amortization |
|---|---|---|---|
| $25,000 | 8.5% | $177/month | $217/month |
| $50,000 | 8.5% | $354/month | $434/month |
| $75,000 | 8.5% | $531/month | $651/month |
| $100,000 | 8.5% | $708/month | $868/month |
Draw Period Strategy
Best approach: Pay more than interest-only
- Reduces balance before repayment period
- Minimizes payment shock later
- Saves thousands in interest
Example: Pay $500/month on $50,000 at 8.5%
- Interest-only: $354/month → balance remains $50,000
- $500/month: balance drops to ~$32,000 after 10 years
Our Calculator Factors Draw Period
Our tool includes:
- HELOC draw period length (typically 10 years)
- Interest-only payment calculation
- Combined mortgage + HELOC payment
- What happens when draw period ends
What Happens After Draw Period?
When the draw period ends (usually after 10 years):
- No more borrowing allowed
- Enter repayment period (20 years)
- Payments jump significantly (often 2-3x higher)
This is repayment shock - our calculator helps you prepare for it.